The Energy Department is waiting for the signal of the Foreign Affairs Department for the lifting of the moratorium on oil and gas drilling in West Philippine Sea with the impending depletion of Malampaya natural gas reserves.
“We are doing this with a sense of urgency because we need it for our national energy security. But we are being very analytical, being very careful to make sure that we do the correct [action],” Energy Secretary Alfonso Cusi told reporters.
Cusi said the department was waiting for a signal from the Foreign Affairs regarding talks with China for a possible joint development of West Philippine Sea.
“What will trigger [the lifting of the moratorium] is confidence building on both sides. We develop the trust but trust must be supported with concrete actions…So we have to get that so that once we lift, no any untoward action can happen,” the energy chief said.
Cusi said the department had started preparations for the lifting of the moratorium.
“DFA and DOE are working together so that we can resume work at the contested areas and we are looking for ways…We are looking for ways, solution, a way to move forward that is a win-win for all,” he said.
Cusi, however, said Forum Energy Plc., which owns the majority stake in service contract 72 or the Recto Bank, had not formally asked for a lifting of the moratorium yet.
“We have to give the order that they can resume, before they start. We can’t give [a timeframe]. We don’t have the control of all the things,” he said.
The department earlier listed short-term targets, including the lifting of moratorium on West Philippine Sea exploration, to revive the country’s oil and gas sector which was on a standstill amid low prices and industry challenges.
The department said in a budget presentation to Congress that these targets included assessing and reviewing reserves, lifting the moratorium on service contracts affected by the territorial dispute in the West Philippine Sea and monitoring and supervising work programs of contractors.
Service contracts under moratorium include Forum Energy Plc.’s SC 72, which covers a 8,800-square-kilometer area west off Palawan (Recto Bank) and is estimated to contain bigger reserves than the Malampaya gas project.
The department previously granted a force majeure to Forum Energy on SC 72 due to the territorial dispute even as the company already spent around P1 billion for pre-development activities.
Aside from SC 72, the department granted PXP Energy Corp. (formerly Philex Petroleum Corp.) a force majeure on SC 75 offshore northwest Palawan near SC 72 (Recto Bank) and SC 58.
Nido Petroleum Corp. of Australia and PNOC Exploration Corp. also sought to suspend their work program under SC 58 in northwest Palawan, while the dispute was being resolved.
SC 58 is a deep water acreage covering an area of 13,440 sq km west of SC 57 and SC 38 or the Malampaya gas field.
Cusi also said the department would conduct energy contracting rounds and offshore safety induction and energy training. Cusi said the department was also looking at Swiss Challenge to replace the traditional energy contracting round.
“What makes it different is, before, you wait for DoE for the announcement that we’re going to open this area for exploration for contracting, so development is slow. Right now, some have started studies and they want to explore that area,” Cusi said.